Patriot Coal's plan confirmed; company expects to emerge from Chapter 11 on Dec. 18

By Lisa Kerner

Charlotte, N.C., Dec. 17 - Patriot Coal Corp. announced that the U.S. Bankruptcy Court for the Eastern District of Missouri confirmed the company's plan of reorganization on Tuesday.

Patriot will close on its exit financing, complete the rights offerings and emerge from Chapter 11 reorganization on Dec. 18, according to a company news release.

With the final step completed in Patriot's financial restructuring, president and chief executive officer Bennett K. Hatfield said, "We look forward to a new beginning as a well-capitalized company providing a competitive product to the electric utility and steel industries."

As previously reported, the court approved the company's disclosure statement on Nov. 6.

Creditor treatment

Treatment of creditors under Patriot Coal's amended plan will include the following:

• Debtor-in-possession facility claims, administrative claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of other secured claims will either be paid in full in cash, have their claims reinstated, receive proceeds from the sale of the collateral securing the claims or receive that collateral;

• Holders of eligible senior notes parent claims will receive a share of rights and a stock allocation. Those not eligible to receive the rights will receive a share of a cash consideration;

• Holders of convertible notes claims and general unsecured claims will receive a share of rights and a stock allocation. Those not eligible to receive the rights will receive a share of a convenience class distribution;

• Holders of convenience class claims will receive a share of a cash convenience class distribution; and

• Holders of interests in Patriot Coal and section 510(b) claims will receive no distribution.

Rights offering

The court also previously authorized Patriot Coal to move forward with its proposed rights offerings in conjunction with its plan. The plan will be fully backstopped by Knighthead Capital Management, LLC and certain affiliates.

In addition, the court approved an agreement with Barclays and Deutsche Bank to arrange new exit financing and post-emergence credit facilities of $576 million.

Patriot Coal, a St. Louis-based miner, producer and seller of thermal coal, filed for bankruptcy on July 9, 2012 in the U.S. Bankruptcy Court for the Southern District of New York. The case was transferred to the U.S. Bankruptcy Court for the Eastern District of Missouri under Chapter 11 case number 12-51502.

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